On Friday, Doray announced that Andy Well would produce just 50,000-55,000 ounces of gold in the 2017 financial year, down from the previous guidance of 65,000-70,000oz.

The reason was a significant reduction in the strike length at the Wilber lode.

Capital development will be reduced for the rest of the financial year to optimise cashflow.

It follows a review by new managing director Leigh Junk.

Andy Well produced 14,390oz at all-in sustaining costs of $A1589 an ounce in the December quarter, but the company remains positive on its future.

“The main story unfolding at Andy Well is Gnaweeda,” Junk told analysts on a teleconference this morning.

Gnaweeda has a 266,000 ounce resource with an updated figure due this month.

Following the updated resource, Doray will move to a 3-6 month feasibility study.

“We could have an open pit, or open pits, at Gnaweeda within 18 months, and the potential for a long-life operation, which could alter the while mine profile at Andy Well,” Junk said.

“We’ve reduced capital development to get us to that point.”

Doray’s Deflector mine produced 8712 ounces of gold and 1404 tonnes of copper from transitional ore, with the declaration of commercial production not expected until early in the next financial year.

Doray generated revenue of $45.6 million, and closed December with cash of $21.2 million after raising $24.7 million during the quarter.

The company also had $4.9 million of gold on hand, and $1.4 million of concentrate.

In addition, Doray has copper-gold middlings with an estimated value of $15.8 million.

Junk said a competitive tender process was underway with two parties for the sale of the middlings.

Gross debt was $69.5 million after $5 million was repaid during the quarter.

The next debt repayment is due at the end of March, and Junk said the aim was to reach some sort of agreement with lenders by that time.

Shares in Doray were down by 1.6% to 44.2c.